We have been looking this week at variousclaimsmade by politicians on both sides of the aisle about energy prices. This comment by Rep. Upton was made after the House of Representatives passed a bill requiring swift approval of the Keystone XL pipeline, which would carry heavy crude oil from Canada’s Alberta province to the Gulf Coast. (The Obama administration has claimed it needs more time to study the possible environmental impact.)

But we are interested in his assertion that Keystone “will…help bring down prices at the pump.” Is this correct?

The Facts

First of all, even if the Keystone XL pipeline were suddenly approved, it would not be completed until at least 2014, so building it would have no impact on gasoline prices this summer, predicted to be near record highs. We could not find any experts, even those referred to us by Upton’s staff, to say that the prospect of the pipeline being built in the future would somehow impact the price of gasoline today.

Still, Upton did not specifically claim that this supposed decline at the pump would happen anytime soon, though a tweet from House Speaker John Boehner on Feb. 17 claimed “House GOP acts to address rising gas prices” after the bill containing the Keystone XL provision was approved.

Second, the price of gasoline depends on a complex array of factors, though the largest one is the price of crude oil. (See this handy tutorial by the Energy Information Administration.)

The Keystone XL pipeline, which would carry 1.1 million barrels per day, is specifically designed to deal with the fact that increased production of crude oil in Canada and the Great Plains has left a glut in that area — overwhelming refinery demand — and it is difficult to get the oil to the Gulf Coast, the center of U.S. refining. This has depressed the price of crude oil in the Midwest, though the Midwest refiners have not passed on the savings to consumers. (The price of gasoline in that area essentially is dependent on the global price because otherwise refiners would not ship the gasoline there.)

A historical note: West Texas Intermediate crude oil is priced at Cushing, Oklahoma, and historically traded at a premium to other crude oils. Cushing pipelines flow to the Midwest, not to the Gulf Coast, but the price of WTI crude has recently traded at a discount because of the oversupply in the Midwest. (Here’s a map that shows the route.)

There is a lively debate among oil-industry analysts about whether Keystone will impact gasoline prices in the Midwest. Philip K. Verleger, a noted oil economist, has argued that the pipeline would increase gasoline prices in the upper Midwest. He said yesterday that he stands by that estimate, figuring it would amount to between five and ten cents per gallon.

“Overall, the pipeline will have no impact on prices consumers pay. None. The reason is that the products produced from the crude will be sold into the world market -- exported -- if prices fall below world levels,” he said in an email. “This means that consumers outside the Midwest will get no benefit from the line while consumers in the upper Midwest may pay more.”

Last year, however, the Department of Energy disputed Verleger’s analysis in a memo to the State Department. The memo asserted that “gasoline prices in all markets served by” refiners in the East Coast and Gulf Coast “would decrease, including the Midwest.” However, the memo also noted that “the current distortion of Midwest and Gulf Coast oil prices caused by the Cushing congestion will be alleviated whether or not the President approves the Keystone XL pipeline permit application.”

Verleger responded by supplying us with testimony that he said demonstrated that “Keystone people testified under oath that they would use the pipeline to manipulate prices.” It is rather technical material but on pages 90 to 92, you can see testimony about how producers would get lower “netbacks” from Houston but offset the lower netback from higher netback pricing in Chicago. (A netback is amount paid at the point the oil is put into the pipe.)

We spoke to other oil experts and received a mixed verdict on whether Keystone XL would make much of a difference on gasoline prices. “All else equal, more supply does put downward pressure on price,” said Jim Burkhard, managing director of global oil for IHS Cambridge Energy Research Associates, who has testified before Congress in support of the Keystone XL pipeline. But he hesitated to predict the impact.

Blake Eskew, senior vice president at the oil consulting firm Purvin & Gertz, Inc., said that Keystone “has the potential to affect prices somewhat, but it’s a fairly small impact.” He said it might be worth “a few cents” at the pump.

We also find it interesting that TransCanada, in its fact sheet on the Keystone XL pipeline, makes no claims that it will reduce gasoline prices—only that it will not increase prices. “The price of international oil prices has no impact on the operation of our pipeline and we do not profit from changing market changes,” TransCanada said. “Prices are set on a global level.”

Upton’s statement in many ways is reasonably framed — we note he says it will “help” lower prices — but he goes a step too far when he asserts that building the Keystone XL pipeline will have an impact on gasoline prices. Clearly oil experts disagree on whether prices will be affected, but those who believe as a matter of economics that it will ease prices say the impact will be modest. Indeed, even the TransCanada executive, who had a stake in touting the project, used the word “could,” not “will” like Upton.

Word choices have meaning, and it is best for lawmakers not to overstate the impact of projects they are advocating.